Most of us have goals of saving enough money for a stable future. But there are many myths surrounding money which slow down your financial growth. Have you ever wondered how to grow your money faster? Read on to find out if you believe in these misconceptions about wealth, and weed them out of your life.
You need to be rich to invest.
Regardless of your income level, investment is always a good option. Your wealth not only includes what you earn, but how much of that you can save and how you are eventually going to mobilize those savings. If you make less money than you want, it becomes even more important for you to start saving money from salary and investing at an earlier age. Everyone can, and everyone should invest.
“I don’t earn enough to save.”
Your income does not determine your wealth. What you need is a plan and not just expectations. While you might not be earning enough to fulfil all your dreams, you can still start saving right away. Real wealth always comes from your passive income. By investing your savings in the right assets, you will get a steady stream of income that supplements your salary. You can also utilize your passive income to cover your expenses, freeing up your salary for investment purposes. Remember, dreams don’t work unless you do.
Buying a house is better than renting.
Buying a home may not be the best decision for everyone, especially if you intend to live in it. Renting a property is often cheaper than a mortgage, and if you are still young, you can put your hard-earned money to good use by investing elsewhere, with good returns. What’s more, in a rented home, you also save the expenses on maintenance and repairs.
Investment is best done at an older age.
Building wealth is a slow and measured process – you cannot expect to get rich overnight. By starting early and following simple money saving tips, you can also reap the rewards of a financially stable future. You might hear stories in the media about people who got rich instantly, but in reality, growing your money is a painstaking process. Make a habit of investing every month, even if it is a small amount. With the accumulation of compound interest over time, you will have a little nest egg of your own later in life.
“I will invest when the markets are down.”
That is much easier said than done. Suppose the markets do drop – what is the guarantee that they won’t drop further? No one can accurately predict when the market will fall. If you keep waiting for a downturn, you are wasting precious time which you could use to grow your money. Ups and downs are an integral part of the markets; as long as you stay invested long enough, any time is a good time to invest.
“I earn a good salary, why do I need to invest?”
If you are fortunate enough to have a job that pays handsomely, you still need to focus on how to save money. You should make a habit of saving more than you spend every month. As incomes increase, our lifestyles also keep changing. As a result, saving can often seem as hard, if not harder, for someone with a higher than average salary. Having both partners earning can also make you casual about spending that money. By comparing your salary and expenses, you can decide if it is time to cut back on unnecessary spending.
Going for maximum returns? Think again.
When you do decide to invest money in a venture, you might be tempted to go for the highest rate of returns. However, remember that this is a double-edged sword. Risk and reward go hand-in-hand – investments with the highest returns might help you in the short term, but they are more prone to volatility. Often, junk stocks will seem to be the most lucrative, but high losses usually offset any periods of high growth that such assets see. It is better to settle in for a balance between risk and rewards.
“My money is safe in a savings account.”
While a savings account does offer you interest, it is typically too small to matter. And once you factor in inflation, a savings account can often have a negative real interest rate. If your aim is to make your money work for you, you cannot just park it in your account. Investing it sensibly will give you much higher returns over time.
Don’t bite off more than you can chew.
Before you go about planning to buy a yacht, ask yourself this: is it a realistic target? Society today is increasingly on a mad rush for luxury. You should be conscious of the aims of investing. Setting unhealthy financial goals will not only strain your resources but even if you are able to achieve them, you will never be satisfied.
Instead of trying to live beyond your means or envying other people’s status, set goals that work for you and that you can achieve. Remember, you are the one who will pay for them and use them in the future. It doesn’t matter what other people earn or spend on.
Interested in unleashing the full potential of your money? Contact us to schedule an appointment, and we will answer all your doubts and queries on how you can end bad money habits and start investing today.